Dalian iron ore extended gains on Wednesday as market participants bet on the prospect of steel demand picking up since China has entered its peak construction season.
Singapore benchmark iron ore, however, felt slight downward pressure after Federal Reserve Chair Jerome Powell indicated the U.S. central bank could raise interest rates at a faster pace.
The most-traded May iron ore futures contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trading 0.83% higher at 912 yuan ($130.95) a tonne, following a rise of 1.34% on Tuesday.
“Both supply and demand [of steel products] continue to recover,” analysts at Haitong Futures said in a note.
On the Singapore Exchange, the benchmark April iron ore SZZFJ3 was at $126.8 a tonne as of 0700 GMT, down 0.13%.
“Hawkish comments from central bankers weighed on sentiment across markets. The subsequent risk-off tone saw commodities come under pressure,” analysts at ANZ bank said in a note.
China imported 194 million tonnes of iron ore in the first two months of 2023, a year-on-year rise of 7.3%, customs data showed on Tuesday, and the highest ever for the two months combined, according to Reuters calculations.
Though futures price of coke–the other steelmaking ingredient–showed signs of weakening, analysts believe fundamentals will lend some support to spot prices in the near term.
Coke DCJcv1 fell 0.87% while coking coal DJMcv1 managed to shrug off its losses from the morning session to end daytime trading 0.13% higher.
Rebar on the Shanghai Futures Exchange SRBcv1 grew 0.26% to 4,249 yuan a tonne, hot-rolled coil SHHCcv1 was flat and wire rod SWRcv1 nudged down 0.22%.
“The significant increase in [steel] exports eased supply pressure in the domestic market to some degree. Also, it boosted mills’ confidence in holding their prices firm,” analysts at Everbright Futures said in a note.
Source: Reuters
